Home > Latest highlights

WTI Signals Slower Wage Growth, as Job Market Weakens

Arlington, Va. (Nov. 18, 2008) — With unemployment rising and likely to go higher, the pace of wage increases in the private sector is expected to slow in the coming months, according to the preliminary fourth quarter Wage Trend Indicator™ (WTI)released today by BNA, a leading publisher of specialized news and information for professionals.

The index declined for the third consecutive quarter this year to 100.38, down from the third-quarter reading of 100.67 (second quarter 1976 = 100).

“Although preliminary, the latest decline in the WTI is fairly large, reflecting the bad economy and an increasingly weak labor market,” economist Kathryn Kobe, who worked on the development of the index for BNA, said. “We're already seeing a slowdown in wage growth that is likely to continue,” Kobe said.

The unemployment rate, which jumped to 6.5 percent in October from 6.1 percent in September, is expected to go higher in the months ahead, economist Joel Popkin, who developed the index for BNA, said. Another factor likely to exert downward pressure on wage growth is a lowering of inflation expectations in response to recent sharp drops in crude oil prices.

Consistent with recent economic trends, three of the WTI's seven components made negative contributions to the preliminary fourth quarter index, while three were neutral and one was positive.

---

[an error occurred while processing this directive]